Debt metrics explained
Places debt levels and interest burden using selected balance-sheet and earnings metrics. Sectors and business models differ structurally here, which is why the metrics are read in their own context.
What is the debt-to-equity ratio?
Total debt relative to equity, shown as a multiple. Higher values mean a larger share of debt relative to equity. Typical levels differ markedly by business model and sector. When equity is zero or negative the ratio is undefined; we then show and score equity relative to liabilities.
What is the debt-to-assets ratio?
The share of debt in the balance-sheet base used, shown as a percentage. It describes the company’s financing structure.
What is net debt to EBITDA?
Net debt relative to the earnings measure used, expressed in years. It states arithmetically how large net debt is against that measure — a ratio, not a repayment forecast. A negative value means net cash: the company holds more liquid funds than interest-bearing debt.
What is the interest coverage ratio?
Operating profit relative to interest expense, shown as a multiple. It states by what factor the operating profit used exceeds interest expense. Typical values differ by sector and capital structure.
How the metrics become a score
How a metric is placed within its comparison group, and how the area scores and the metrics score are formed from it, is described in the methodology.